Due diligence isn't optional.

Commercial due diligence usually takes two to four weeks, depending on the complexity of the property. Tenanted properties with multiple leases require more time to analyse. Unit title properties need body corporate records.

We recommend building adequate time into your agreement conditions.

The answer depends on your circumstances. Buying through a company or trust can provide asset protection but may affect financing options. Tax treatment differs between structures.

We discuss your specific situation and help you understand the implications of each approach.

A Warrant of Building Fitness (WBOF) is a compliance document required for buildings with specified systems such as lifts, automatic doors, air conditioning, or certain fire safety systems. The building owner must ensure these systems are inspected and certified annually.

If a property requires a WBOF, you inherit this compliance obligation when you purchase.

Rent review mechanisms vary significantly between leases. Common approaches include market rent review, CPI increases, fixed percentage increases, or ratchet clauses (where rent can only go up).

The mechanism directly affects your investment return over time. We analyse rent review terms carefully when reviewing leases.

When you purchase a tenanted commercial property, you become the landlord under the existing lease. All landlord obligations transfer to you.

Before purchasing, we analyse the lease terms, tenant payment history, and any outstanding issues. You need to understand what you are inheriting.

Yes. While our deep local knowledge is particularly valuable for Hawke's Bay properties, we handle commercial property transactions throughout New Zealand. Our systems and processes enable us to manage transactions anywhere in the country.

An assignment transfers the existing lease to a new tenant. The original terms continue, and often the original tenant remains liable if the new tenant defaults.

A new lease involves negotiating fresh terms with a new tenant. Each approach has implications for both landlords and tenants.

We recommend consulting an insurance broker for commercial property insurance. Commercial policies differ significantly from residential insurance.

We can identify insurance-related matters during due diligence, but specialist insurance advice ensures you have appropriate cover.

Before signing, review the rent review mechanism, outgoings allocation, personal guarantee requirements, assignment rights, and make-good obligations. Commercial leases differ significantly from residential tenancies, and there's no Consumer Guarantees Act protection.

We recommend professional legal review before committing. A small investment in lease review can save significant money over a 3-6 year term.

A ratchet clause means rent can only go up at review, never down, even if market rents fall. This protects the landlord but can leave tenants paying above-market rent.

We recommend resisting ratchet clauses where possible, or negotiating alternative review mechanisms that allow for market adjustments.

You can't unilaterally break a commercial lease. Options include: negotiating early termination with your landlord (usually involves a surrender fee), assigning the lease to another tenant, or subletting with landlord consent.

Simply abandoning the premises leaves you liable for rent until the lease ends or the landlord re-lets the property.

Make-good obligations require you to return the premises in a specified condition when leaving. This can mean removing all fit-out, repairing damage, repainting, and sometimes returning to shell condition.

Make-good can be a substantial expense for larger premises. Know your obligations early and budget accordingly.

A personal guarantee means you (as director or individual) are personally liable for rent if your company defaults. On a 6-year lease at $100,000/year, that's potential personal liability of $600,000.

This often continues even after assigning the lease to a new tenant. We explain guarantee implications and try to negotiate limitations where possible.